SST: Gov't still fine-tuning list of goods, services

The complete list of items covered by the sales and services tax (SST) will only be finalised next week, said Customs Department director-general T Subromaniam (above).

"We will finalise (the complete list) in a couple of days. Next week, it will be finalised," he told Malaysiakini.

Putrajaya plans to start imposing SST beginning a week from now on Sept 1. As of today, the relevant laws have yet to appear on the Federal Gazette website.

However, there have been news reports and viral messages of late claiming that many essential items will be subjected to sales tax, which could be as either 5 or 10 percent.

This stems from the Customs Department's proposed sales tax rate document, which has been made available on the department's website. 

For instance, an Oriental Daily report on Aug 23 reported that all cosmetic products - including essential ones such as shampoo and toothpaste - would be subjected to a sales tax at the 10 percent rate.

So far, Finance Minister Lim Guan Eng had stated that Putrajaya intends to exempt 5,443 goods and services from SST, which is more than the 545 exempted items taxed under the goods and services tax (GST) imposed by the BN government.

The minister said the SST comprised 38 percent of the Consumer Price Index’s (CPI) basket of goods, while the GST covered more than 60 percent.

The sales tax will be imposed on goods manufactured in Malaysia and sold, used or disposed of, as well as goods imported into the country.

The services tax will be levied on any taxable services provided in Malaysia. Taxable services will be determined by the finance minister. The finance minister has the power to fix the SST rate. 

List of exempted goods

On July 19, Customs Department released a list of proposed exempted goods, which comprised mainly grocery items, such as sardines, instant noodles, frozen and produced meats, dairy products, coffee, tea, chilli sauce, tomato sauce, cereals, wheat, margarine, rice, noodles, vegetables and fruits.

Another list outlined proposed goods that fall under the rate of 5 percent and 10 percent, as well as exemptions. The majority of processed food are exempted. 

Food items such as cheese, abalone, dairy spread, canned and processed vegetables, sausages, meatball, nuts, coconut milk, tempoyak, cooking wine, groundnut oil and butter will be subjected to a sales tax of 5 percent.

The majority of kitchen items, household and electronic appliances, including tissue rolls, are in the 10 percent category.

All cocoa products such as chocolate bars and chocolate chips are some of the food items subjected to the 10 percent rate as well.

Cosmetic products and perfumes, which were previously taxed at six percent of GST, will be subjected to 10 percent sales tax.

According to the list, the government plans to exempt schoolchildren's reference books, dictionaries and comic books but will impose a 10 percent tax on stationery such as pencils, colour pencils and school shoes.

Electronics such as mobile phones, smart cards, routers, modems, laptops and its accessories which include keyboards, monitors and mice will be subjected to the 5 percent rate, while the majority of electronic and electrical appliances will be subjected to the 10 percent rate. -Mkini